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fareed zakaria "gps" starts right now. this is "gps "the global public square. i'm fuwreed zakaria coming to you from davos, switzerland. you know, davos is often caricatured but i find it u useful. wherever could you meet leaders from all over the world in an informal setting for over four days. that has been the case for the two extraordinary interviews i have for you. the first is with larry summers the head of the economic council at the white house and the second is foreign minister mottaki. i remembered back a year ago in davos when the entire financial world was in a state of shock.
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the global financial system was crippled and the global economy was in its most significant contraction in 50 years and gloom was pervasive. this year, the financial system has stabilized, almost every major economy in the world is beginning to grow again and few political and social upheavals as a consequence of the crash of 2008. so, that should be reason enough to cheer loudly, right? but the mood at davos is unease. there is a general perception that we're entering a new world. the advance industrial world has staved off catastrophe but at great costs. debt deficits. the old certainties about free markets and free trade are under assault. power is moving from west to east. some of that unease is expressing itself in concerns of president obama's leadership. is he becoming a populist and broader concerns about america's decline. so, who better to talk to about all this than larry summers, one of the most brilliant economists
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in the world, former treasury secretary and now advising president obama in the white house. after that, an extraordinary candid open, even angry conversation with the iranian foreign minister mottaki. the majority of it was in engli english. many dignitaries speak english but will not do so in interviews. anyway, i started speaking with the foreign minister about iran's nuclear program and he spoke for several minutes and answered in prussian. but when i asked him about iran's disputed elections and the resulting protests, mr. ottaki took off his ear piece and asked to finish in english. >> for those who are coming to the street firing, healing, shooting by the bombs and other things and making problems. >> there are no reports that the protesters were shooting, firing. there are reports that the
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besiege and the revolutionary guard were doing that. >> you do not agree there was violence there? >> there was violence, but from the protesters. i think you'll find it as riveting as i did. first larry summers and then the iranian foreign minister. you won't want to miss any of this, let's get started. larry summers, thank you so much for joining me. >> glad to be with you, fareed. >> let me ask you the criticisms from the left and the criticisms from the right because you have plenty of both. on the left you have people like paul krugman saying you've done too little too late. the stimulus was way too small and you are too soft on the banks and you're only now belatedly coming to do some of the financial reform you should and that you're going to need a second stimulus otherwise demand is going to disappear in the u.s. economy. >> look, you can argue about what the right, what the right
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size of fiscal stimulus is. here's some things that are true. the fiscal stimulus that president obama passed through the economic recovery act is the largest piece time stimulus in global history. second, it was as large a fiscal stimulus as the congress was prepared to accept at that point and, indeed, the proposal was as it went to conference committee reduces in the congress. third, we always recognized that there was going to be a fwheed for further follow-on action with respect to the financial system, you have to look, it seems to me at what's happened. major financial institutions able to issue equity on a substantial scale, credit
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spreads down back to basically not the bubble levels we had before this crisis, but basically back to historically normal levels. i think secretary geithner deserves enormous credit for directing a strategy that was about private sector capital raising that was about stress testing for transparency to build confidence. you know, if you think about it, fareed, it is actually a rather remarkable thing. if you look at the current projections, don't take anything the administration says, take the judgments that the congressional budget office is reaching. the cost of resolving this banking crisis, the most serious in 70 years because of the way it's being managed looks like they're going to be much less relative to the economy than the cost of the snl crisis or the cost of crises in other countries. so, i think you have to regard the approach as a very
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considerable success. >> let's take the criticism from the right. the fiscal stimulus was fork ladened, not enough of it was directed towards job growth. you're endangering the future of the dollar, you're endanger the future of the american economy. we have deficits higher than at any point than world war ii and the health care bill similarly enormous amount of special interest lobbying goes into it and what you're seeing is an intrusion of government into the economy on an unprecedented scale. >> the president spoke, i thought, very powerfully to the deficit issue in the state of the union. he made the point that the largest share of the debt that we had was the result of a decision during the early part of this decade to launch major tax cuts and to launch two wars and to launch a major new
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medical prescription benefit with no effort. to pay for it. that's the largest share of the debt. the next largest share of the debt is the consequence of the fact that we had an enormouses economic crisis. that's where our debt comes from. when i left office serving as president clinton's secretary of the treasury, the budget surplus, surplus was $200 billion a year and people were projecting that we would pay down trillions of dollars worth of debt during this decade. none of that happened because of the policies that were pursued by the president and by the then congressional majority in both parties. that's why we have a big debt problem that we have to address and we are addressing that problem.
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we were facing a depression. we took emergency actions and no one, few people think that we are facing a depression today and i have to say that when i hear some people talk about increasing student loans for kids from families with a dad or mom unemployed as pork. when i hear people talk about fixing highways that for too long were the object of deferred maintenance as pork. when i hear people suggest that providing a child care credit to a middle class american families is somehow pork. if you look at the components of
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this program, we are being much more transparent and accountable than any government has ever been before. you can follow the progress of every project on the internet and see what's happening with it. see what progress is being made and we're very proud of the number of people who have been put to work. there's a great deal in this recovery program that in addition to creating employment benefits is making this country a better place to live. >> with health care, would it make sense for the president to take a look at the last 10, 15 polls on health care. the massachusetts election and recognize that broadly speaking a majority of the public do not like the health care bill that is currently being proposed with the house or the senate version
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and take a pause, perhaps try and start again, do something that in some way is more resonant with the public mood. >> i thought the president spoke powerfully to that in the state of the union, fareed. and he, i think, took the opportunity to reexplain a great deal of what is contained in the health care bill. he's made clear that he's open to every good idea at this stage, wants to work with anybody in congress who is prepared to work with him in good faith, but theres some things very important to the president. people should not lose their insurance because they get sick. the point of their insurance is to protect them.
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from being sick. people, everyone should have access to a reasonable insurance policy. companies should not be able to gain unfair advantages against their competitors by dropping health insurance. president is open to different approaches, but he is very committed to the principal that we are on the brink of achieving that 30 million people without health insurance will have access. >> you think you're on the brink of achieving it? >> legislation has, for the first time in history, passed both houses of congress and we are very close to working it
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through. obviously, the political situation right now is very different because of what happened in massachusetts, but as the president said in the state of the union address having come this far, we need to find the best way forward, not debate whether we're going to go forward. speaking as an economic adviser to the president no one could responsibly be satisfied with the status quo and the trends contained in the status quo. that's why the president has rightly made health care such a priority. and we will be back with more of my interview with larry summers right after this. >> we are witnessing an incredible and profound change
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in china and india and in many other emerging countries. we're seeing living standards grow for more people, more quickly than in any point in global history.
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with larry summers, one of the president's chief economic advisors.
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you used to come to davos when you were, you would go around with deputy secretary of the treasury dispensing all over the world and there is an enormous amount of unease and you see a situation where china is growing 9% a year and the united states remains, you know, slowly crawling out of a recession. there is a sense that we are saddled with debt and they are booming. are we witnessing some kind of power transition? >> you know, i think phrasing it in terms of a power transition, fareed, makes what's always a mistake in the economic area, which is to think in terms of zero sum games. we are witnessing an incredible and profound change in china and
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india and in many other emerging countries. we're seeing living standards grow for more people, more quickly than in any point in u.s., in global history. that is a hugely positive thing and it is a very fundamental thing. but that success is not, if we pursue the right policies, a threat to the united states. it is an enormous opportunity. it is more potential for us to grow our capacity to export than there ever has been before. that's why the president set a goal of doubling our exports over the next five years in the state of the union in creating 2 million jobs in the process. it is more potential for the united states to benefit from
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lower priced products that enable people's incomes to go further than ever before. it creates more policy potential for cooperation on a whole range of issues, security issues, environmental issues than before. we are moving into a new epic because of the profound changes in the developing world. it will force a very different ways of thinking on the united states and very different ways of ordering the world's system. president obama took a hugely important step. i think it's one of the things that got some attention at the time but i suspect when history books were written we'll get much, much more by ushering a transition, ushering in a
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transition from the traditional g-7 to a g-20 as the principal grouping of countries for decision making, for political decision making in the economic sphere. but i don't think this represents a threat. in many ways if we have the wisdom, if we have the confidence to embrace these changes, they represent a staggering opportunity. the world my children inherit can be a safer, prosperous, more secure, better world than the one we've been living in and nothing in these trends reduces the responsibility of all of us
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as americans to do everything we can to create that world. >> larry summers, thank you very much. >> thank you. >> for those who are coming to the street firing, killing, shooting with the bombs and other things there are no reports -- >> there are no reports that the protesters were shooting and firing. there were reports that the besiege and the revolutioninary guard were doing that. >> you do not agree there was violence there? in the south. i'll never forget. it used one tank of petrol and i had to refill it twice with oil. a new car today has 95% lower emissions than in 1970. exxonmobil is working to improve cars, liners of tires, plastics which are lighter and advanced hydrogen technologies that could increase fuel efficiency by up to 80%.
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and now we get a rare perspective from iran answers to the questions many western powers opposed from the foreign minister of iran mottaki. mr. foreign minister, it is a pleasure to have you on the program. >> thank you. >> you know that millions of iranians do not believe the election was fair and that people took to the streets and there were protesters, this is not my opinion, these are the opinions of patriotic iranians who felt that the vote was a fraud. >> may i continue in english?
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>> sure. >> when the result of the election was announced, most of the people near to all the people protesting to result of the election went to their home and some few parts they continue -- >> people went to their homes because the besiege was firing on them. >> no, no. the people who accepted the result because they saw they had some miscalculation. >> but this is not, you know, western press' view that the election was fraudulent. this is the view of the former president of iran, this is the view of foreign prime minister who is the head of the guardian coun council.
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this is the view of many distinguished members of the iranian government and founders of the revolution. they understand the iranian system and certainly they're not all fools. >> you cannot separate the dignitaries or the society from the people themselves. you should consider all. for the people, for the politicians, i mean, you have to deal with them based on rules and regulations. ruling of law is the main base for any solution, any compromise, any craft understanding. for the people there, they will explain their views. we had the election of the united states for the second term of mr. bush.
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there was some protesting to the result of the election. the head of the judicial system who was the nominated by mr. bush judged for the result of the election. but here they went to recount the votes. at least 10% and, according to the instruction of the leader, there was possibility, if they were questioning, for new war. everything was clear and transparent. >> one way you have dealt with these protests is by very fierce crackdown. i mean, just this week the, your court, the revolutionary court
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sentenced 11 people to death for an election and very few democracies in the world where you'd find the way in which you deal with a peaceful protest is by sentencing people to death. >> and i command you to raid what was the crime which they have done. and, also, at the first phase of the court the result can be to consider based on their wish, their request and the second scale of the court, the people who protest, who have objection to the result. they should receive their answer. and the answer should be given based on rules and regulations through the law and it is given. for example, 92, 95 person,
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maybe they're not satisfy would the result in their heart, but through rules and regulations they have received the answer. who remain in the street? in which country in the united states do they are flexible for those who are coming to the street firing, killing, shooting with their guns and other things. >> there are no reports, there are no reports that the protesters were shooting, firing. there are reports that the besiege and the revolutionary guard were doing that and in not in the united states -- you do not agree there was violence there? >> there was violence, but from the besiege against the protesters. >> you mean the besiege was
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fighting the banks, the mosque, the buildings and destroying everything in the street? that was the besiege? you mean the ordinary people. >> at the very least you would agree, foreign minister, you are now in a very divided society. you are by your own admission, there are members of the elite. key members of the establishment. >> we are not divided. >> you have a green revolution within your country. >> you could see 21 days ago we call it ninth of the month of day when the people came to their street. to show their protest against those in tehran. if you count that population, i was with the people on the street that day.
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tehran has not seen such a crowd of people who came to this street since last 30 years. not only in tehran, in all the cities in iran. at the same night i had interview i said it is divided. one side is 45 millions of people who have one voice and the other side we had few thousand people who came in tehran's streets. and from abroad who are in the situation, they can't decide. >> look, if you had nuthing to fear, mr. foreign minister. why not open everything up? you jailed hundreds of people and jailed one of my colleagues from "newsweek" on completely baseless charges. these are the activities of a police state, not a democracy.
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>> everyone is equal in front of law. >> yes, but that does not mean innocent people can be herded off to jail. >> if anybody is innocent, definitely as the court has shown -- >> there was no court procedures and the revolutionary guard picked him up. there is something going on in your country where the revolutionary guard is taking over and thefunctions being done by the old clerical establishment. and you know this. >> the first day in copenhagen climate change 1,000 people were arrested. >> arrested, not sentenced to death. >> okay. arrested. for the violence, but if they are going to kill some people or to burn everywhere, to damage so many things, definitely the
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approach was more stronger. what you could see in the street of paris or some other places, democracy is good somewhere and that somewhere else, if we are coming to democracy, we should be committed to democracy everywhere. and here we should not have a judgment based on double standard. >> and we will be right back with marouschehv mottaki. >> you say you're doing everything legally and transparentally but you had to reveal a new facility because it was about to be revealed. >> but we had already announced that at that time. therefore, we have fulfilled our
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in his state of the union speech president obama said iran must halt its activity on the nuclear front or face sanctions further action. what is your response to president obama? >> translator: we have clear nuclear activities in the country. of course, he has the right to continue his efforts to understand our nuclear program. and for his information we say that iran is doing everything based on the law and is our right and we continue our peaceful, nuclear activities within the framework of the
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international law and rules. so, for our legal activities and for the legal activities of all countries, nobody has the right to threaten them. >> but you say you are doing everything legally and transparentally, but, of course, you had to reveal a new facility because it was about to be revealed. surely this is the kind of behavior that gives the international community the suspicion that iran is actually not abiding by the letter or spirit of its agreements with the iaea. >> translator: in this work they announced that iran had not informed the iaea about its
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activities. but we had already announced that at that time. therefore, we have fulfilled our obligations. >> you are playing games, mr. foreign minister. you announced a few days earlier to simply preempt their announcement. >> translator: according to the legal framework, we should have done it 18 months before the injection of uranium and we did it. >> all right, let me ask you where iran stands now because at times it has seemed that iran wanted to find some kind of agreement it could come to with the iaea and with the international community and then at times there has been a sense of defiance. earlier, maybe six months ago,
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there was a sense among many people that iran was putting forward a serious offer to negotiate and then it was withdrawn. why this lack of clarity? do you want to find some way to come to a resolution with the international community on the nuclear program in a way that the international atomic agency will certify that you are abiding by your agreements? >> we have, we continue our contacts, legal contacts with the iaea and we continue our activities under the inspection of the agency. and at the same time, we will continue our activities according to the law and i think, you know about the latest development about this for the
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next year. we need uranium, uranium and for medical isotope in the reactor and we have already announced to the agency about our requirements and those countries that have the fuel available, they should meet our requirement based on the rules and regulations. the tehran reactor was constructed by the americans before the revolution and the americans provided the fuel before the revolution. but after the revolution, we have tried to meet our requirement through other sources. and there's been a proposal to exchange the uranium.
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we accepted that in principal in order to give uranium of 3.5 and take and return the uranium of 20%, according to our needs. the proposal is on the table and that can be finalized and be carried out within the framework of our agreement. and we think that if we want to carry it out, if you want to implement the formula, it will be in the interest of all parties and on the other hand it can help to build a confidence for us. >> so, what can you do, given the history to assure the
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international community that iran is not pursuing a nuclear weapon? >> translator: our nuclear activities are transparent and over the past years the agency has inspected our sides and they have and they saw that iran had no diversion. they can continue their inspections. this is about the main team of our nuclear activity in iran. nobody should ask us to ignore the rights of the iranian people. like other members of the nonproliferation treaty and a
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member for 40 years in the iaea has the right to enjoy, to enjoy its rights. >> do you still believe that the obama administration is willing to try and make some kind of an agreement with iran to resolve the nuclear issue? >> translator: it is in the interest of all parties to follow the rules and the internationally accepted rules. therefore, we think if president obama wants to make his promises to make his promises, he should
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accept and pay attention to certain principals and then he should enter into a practical process. and with this approach, we can be optimistic. and we hope that we will have some conditions to help him. >> meaning what? what conditions? >> there should be willingness or the political will in order to realize what he says. >> on that note, mr. foreign minister, fascinating conversation, pleasure to have you on. >> thong.
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hello, i'm fredricka whitfield in the cnn center in atlanta. ten americans have been charged with child trafficking in haiti. haitian officials say the idaho-based charity workers tried to take 33 children into neighboring dominican republic without the proper papers. the workers say they thought the children were orphans and they insist they were trying to find them shelter across the border.
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>> by the end of the day we were basically held in jail and the children were all taken from us, which, honestly, our tears have not been for ourselves, we are fine. it is for these precious children who have lost everything and we've given them, we've been up several nights for them caring for them and comfortable them through the night and it hurts me greatly tonight to know that they are in some camp somewhere, once again, alone and not, you know, just without that comfort. in haiti's capital today the u.n. world food program steps up distributing emergency food rations but for women only. an agency spokesperson said it is their experience that food will be allocated more fairly if left in the hands of women. 16 food distribution sites hope to feed as many as 2 million haitian earthquake victims over the next two weeks. vice president joe biden says a new report on stimulus spending shows nearly 600,000
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jobs were funded in the last quarter. that figure represents just a fracture of the stimulus spending. biden says it indicates the recovery package is on track to save or create 3.5 million jobs by the end of this year. and swiss tennessee extraord nar roger federer is celebrating his sweet 16. it happened early this morning winning the australian open. federer's 16th grand slam title. today's match down under a repeat performance of the 2008 u.s. open, which was also, by the way, won by federer. those are the headlines. more fareed zakaria "gps" in a moment. tdd# 1-800-345-2550 (announcer) we believe in giving every investor
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now for our what in the world segment. what got my attention this week was the senate vote. to keep ben bernanke, the chairman of the u.s. federal reserve bank in his job for another four years. it was a strange controversy that mercifully ended the right way. let's remember again one year ago the financial system was on the brink of collapse. credit had frozen, no one not companies, not individuals could get loans. and that was playing havoc with the global economy. it was not easy to figure out
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how to stop the downward spiral in confidence. ben bernanke did that using imagination, energy, and courage. he made some huge moves into the economy, most of them worked. so much so that we are now in a situation that banks have been stabilized and are making money. martin wolfe, the financial times' economic columnist points out it is typical after a crisis to have banks recover faster than the economy as a whole. so, of course, while they should lend more and be careful about compensation, let's not forget it is fundamentally a good sign for the economy that we have healthy banks and credit back and running. and by the way, this financial rebound is proving good for the fed, as well. i think many people missed a tidbit of financial news earlier this month. the federal reserve announced it'd returned to profit for 2009, up more than $46 billion. that tops the largest yearly corporate profit ever made by
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record held by exxon mobil. and in 2009 you may recall was not a banner year for many banks. it was the fed that went out and bought the things other institutions didn't want to buy, like toxic assets. most of the bets, even the risky ones paid off and all of that money that bernanke made for the fed after expenses was returned to the u.s. taxpayer. while most of the ceos of the big banks and unfold numbers of their underlings got big salaries and bigger bonuses this year, bernanke was not quite so fortunate. the chairman's salary is $196,700. and his bonus, nothing. in the private sector, the kind of investment returns that ben bernanke got would probably earn him, oh, $1 billion. in washington, they got him a lot of abuse and then reluctantly with many insults the senate allowed him to keep his job. we will be right back. to grow .
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now for our question of the week. last sunday i asked about the so-called massachusetts message. the election of the republican scott brown to the seat ted kennedy held for decades. i wanted to know how you felt president obama should react to it. should he move to the left, right, or center? most of you chose the last option, the center. saying that's where he campaigned from and that's where he needs to return. an interesting note on perception. some thought he would need to go right to get to the center while others thought he would have to drive left to get there. meanwhile, others thought left right of center wasn't the issue at all. he should not move anywhere, he should take charge. for this week's question, i want to know who you thought has had the greatest effect on the american economy out of the key financial leaders. ben bernanke, tim geithner, or
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larry summers? which of those has done the most in a positive or negative way to impact the american dollar, workforce, treasury, et cetera? let me know what you think. also, as always, i'd like to recommend a book. mull muller's a noted historian, he takes a fascinating look at how jews have shaped capitalism and vice versa. one of the most fascinating relationships in history. what the book does is looks at how it all began with usury laws in the middle ages that prohibited christians from loaning money and making interest on it. jews were not prohibited and so christians encouraged jews to do it since everybody realized they needed the system of interest and loans. but it brought upon jews much suspicion and scorn. the whole thing is a fascinating read. and please, we love to hear from you. you can always e-mail us at, and if you haven't do

Fareed Zakaria GPS
CNN January 31, 2010 1:00pm-2:00pm EST

News/Business. Foreign affairs and policies shaping the world.

TOPIC FREQUENCY Iran 6, Tehran 5, Copenhagen 4, Obama 4, Schwab 4, Davos 4, Fareed 3, China 3, Ben Bernanke 3, Massachusetts 3, India 2, Haiti 2, Fareed Zakaria 2, Cargill 2, Mottaki 2, Mr. Bush 2, Joe Biden 1, Mr. Ottaki 1, Roger Federer 1, Fredricka Whitfield 1
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